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Seven Wholesalers Share Their Personal Impacts of Covid-19

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On Thursday 9th April we sent a six question survey out to a range of wholesalers throughout Australia. We stated up front that anything they wrote could be published and that we also required their personal and company name.

This last requirement in particular may have deterred some from responding, so we’d particularly like to thank the seven people who volunteered their time to respond in such a frank and open manner.

We’ve listed their responses in the same order below each question. You will notice that not every question has seven answers. That’s because some respondents decided that certain questions were not relevant to their situation.

The respondents in order, including their company names were:

GN: George Nisbet, SOLA Sport

BN: Blake Nelson, SOLA Sport

BD: Brent Dawson, Dawson Sports Group

SV: Stuart Voysey, SCV Imports

NM: Noel McFarlane, Gemini Bicycles trading as Vivente Bikes

ET: Eamon Thompson, KWT Imports

KR: Kurt Rihs, RILU Trading

Do you agree with their thoughts? It’s not too late to share your opinion relating to any of these questions. Please use the comments facility below.

What impact has the virus had upon your sales, both in terms of overall volume and changes in demand for specific product categories?

GN: High end road bike sales have slowed dramatically. P&A is still going strong.

BN: All brand categories are down, some by low percentage others by larger amounts. Demand has shifted to low value or consumable items where investment products (hero brands) have slowed.

BD: Drop in sales, but bigger demand in specific products such as smart trainers and specific MTB equipment.

SV: So far we haven’t noticed an impact in bike sales. Our parts and accessory sales have increased.

NM: We only sell long distance touring bikes and they have stopped almost completely since about March 15th.

ET: Jan to March good consistent business. The End of March was eerily quiet with major news breaking worldwide. We braced for the worst however sales continued and have increased for the start of April. We are noticing more repair work business and entry level priced products.

KR: Substantial increase in sales of e-bikes to bike rental operators and additional demand from retailers for lower-end (cheaper) e-bikes.

How has your supply chain been impacted?

GN: Some delays from China. Airfreight is a big problem now. We have had to switch to sea freight so lead times are longer.

BN: Impact to air freight into Australia. All imports now by sea freight. Additional three week lead time.

BD: Suppliers closed in the US and freight companies slow due to lack of planes in the sky. Taiwan seems ok.

SV: One of our smaller suppliers was having supply issues in January and the virus has added another month to an already long lead time. One of Lauf’s forks, the Grit gravel fork range, is sold out and we won’t get supply until June. The bulk of our parts supply is out of the US with brands such as Chris King, Wolf Tooth, Thomson and Wheels Manufacturing supplying without delay. Our bike brands Surly, Salsa, Soma and All City are all on track with their 2021 models.

NM: We had a shipment leave Taiwan March 30th.

ET: We haven’t been impacted significantly as most of our business is from Taiwan. our supply chain from other parts of the world have seen delays anywhere from 1-3 months on average.

KR: Substantial delays (up to 3 months) for supplies from China. The supply pipeline should become balanced again after May 2020.

Have you noticed a greater or lesser impact upon some countries of origin compared to others?

GN: Yes a greater impact on other countries we know: Italy, USA, UK.

BN: Less impact compared to North America/Europe.

BD: Yes. More so state by state in the USA, some open and some closed.

SV: Companies that use a fusion of different products from different countries are suffering. It only takes one item needed from China to finish building a product and if supply has halted companies suffer as a result. We have seen that with one of our brands. Most of our bike brands are manufactured in Taiwan or Vietnam, so supply has been unaffected… so far.

ET: Our supply chain from Taiwan has not been greatly affected – especially if they manufacture in Taiwan. Taiwanese brands however that have factories in mainland China have had some delays.

Our general parts we source from Mainland China have approximately 1-3 month delays dependent on the region. For example, our factories in north of China have been pretty much operating the whole time where as in the south we have seen delays.

Sourcing stock from our European and US suppliers has been more difficult. Our sealant supplier for example has had strict measures in place which have impacted deliveries significantly.

KR: I only have China as a country of origin.

Focusing more specifically upon the Australian bicycle industry, how long do you expect the recovery process to take?

GN: I estimate six months.

BN: Depending on the downturn period. It could drastically change the IBD landscape. Some dealers that were not strong pre-crisis will cease to exist.

BD: 18 months, but I see a healthier country and more emphasis on cycling, transport and health.

SV: Actually I see the virus as a blessing to some sectors of the industry.

Our dealers are seeing new customers come out of the woodworks ordering bikes. Not just the N+1 guy (who owns a lot of bikes already). Families are buying bikes and hitting the cycle paths in hordes. Gravel bikes, touring bikes and adventure bikes are in great demand. The people that were on the fence with buying a bike are rocking up to their local and finally taking the plunge. What a great problem! Just think if this all happened 50 years ago. Cycling would not have been called an essential industry that had to continue during the crisis. Well done to those that have driven the advocacy that was needed to prove how worthy cycling is in Australia.

I see this building our industry. I see it as an opportunity to show the government and those around us just how great cycling is.

NM: That depends on the sector. For touring bikes, such as Vivente, often intended for international travel, I think until there is a vaccine.

ET: I believe the bicycle industry is holding up well so recovery isn’t necessary.

As for other industries and the economy in general, I have no idea when it will turn around and the uncertainty is very concerning. If the world enters a recession / depression scenario then we all will be impacted no matter the industry.

KR: I expect the bike industry to continue its current volume and even grow further, as demand will increase from commuters scared of crowded public transport and gyms.

Do you think there will be long term changes to our industry as a result of this epidemic and if so, can you please give examples?

GN: On-line will benefit short term and longer term as customers become more comfortable with on-line purchases. Servicing and bikes will still be more brick and mortar store orientated.

BN: Australia could see a drop in competitors in the market as brands either collapse or retract from the market due to not enough volume to sustain distribution.

We could also see bike shops move to carrying less stock and focusing on repairs. But if this happens this will allow online retailers to become much stronger within our economy.

BD: Cash flow. Tightening of payment terms from suppliers right through to retailers.

SV: This is a good time to step up advocacy in parliament to bolster the industry’s voice i.e more bike paths, trails and safer routes to schools so children can ride safely. There are a lot of new bike lovers out there today. I don’t have the figures to back it up, only a daily visual of packed out trails and foot paths that were once void of cyclists!

NM: There might be a bit more local manufacturing and assembly. Bike use levels might increase. Domestic tourism might replace some of the foreign visitors and this includes bike tourism (Derby MTB Park etc). Kids’ bike sales will be up next summer.

ET: Long term changes will be:

– more people will ride because of shutdown of sporting activities and gyms

– more people will get hooked on cycling, enjoying  the benefit it brings to your health and well being

–  the online shopping trend will probably be exacerbated

– now is a good time to bring wholesalers and retailers together with technology and some level of integration such as stock levels or POs. 

KR: The current ease of riding bikes on the road, due to reduced traffic density will result in more pressure on authorities to further improve bike riding infrastructure.

Would you like to make any other comment?

GN: We think commuter bike sales will increase. Kids bikes could also increase and MTB in the mid range price points will be strong.

There is strong demand for servicing of bikes at the moment confirming that more people are out riding.

BN: Take it day by day and take care of your health. We will all get through this!

NM: Most of the impacts will be outside the bike industry. Increased concern with self-reliance, less confidence in globalisation and multiculturalism, less partisanship, less focus on materialism and more on human and environmental connections and personal health. Hopefully, the new awareness of the interconnectedness of the world’s population will help us address the #1 global issue of climate change.

ET: Some outcomes

a) Show your wholesalers’ stock availability live on your online store so you can do drop shipping.

b) Have your shop and certain SKU’S availability live on the dealer locator of your wholesaler. For example a member of the public can see shop XYZ bikes has an item in stock via the wholesaler dealer locator

c) Raise purchase orders / view supplier stock levels / other key info of your suppliers, in your ERP point of sale system without having to login to a wholesaler portal.

d) See wholesaler purchase orders and jump in on indent orders

If you would like to know more about integration please send an email to Jana our integration specialist jana@kwtimports.com.au.

List the point of sale, inventory platform you are using and we will be in touch with a phone call.

KR: The low value to the AU$ not only substantially increases the landed costs of all bikes, but also of all other road vehicles, like cars.

The substantial increase in unemployment and concurrent reductions in income of people still in jobs will put the cost of cars beyond many families and makes bikes, particularly e-bikes attractive alternatives for transport, commuting and the delivering of goods, particularly food.

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